P13-3A Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Jergen Corporation Balance Sheets as of Dec 31

2017 2016 2015

Cash $30,000 $20,000 $18,000

Accounts Receivable (net) $50,000 $45,000 $48,000

Other Current Assets $90,000 $95,000 $64,000

Investments $55,000 $70,000 $45,000

Plant and Equipment Net $500,000 $370,000 $358,000

TOTAL $725,000 $600,000 $533,000

Current Liabilities $85,000 $80,000 $70,000

Long-Term Debt $145,000 $85,000 $50,000

Common Stock ($10 par) $320,000 $310,000 $300,000

Retained Earnings $175,000 $125,000 $113,000

TOTAL $725,000 $600,000 $533,000

Jergens Corporation Income Statements For the Years Ended December 31

2017 2016

Sales Revenue $740,000 $600,000

Less: Sales Returns and Allowances $40,000 $30,000

Net Sales $700,000 $570,000

Cost of Goods Sold $425,000 $350,000

Gross Profit $275,000 $220,000

Operating Expenes(including income taxes) $180,000 $150,000

Net Income $95,000 $70,000

Additional information:

The market price of Jergan's common stock was $7.00, $7.50, and $8.50 for 2015, 2016, and 2017, respectively.

You must compute dividends paid. All dividends were paid in cash.

Instructions

(a) Compute the following ratios for 2016 and 2017.

(1) Profit margin.

(2) Gross profit rate.

(3) Asset turnover.

(4) Earnings per share.

P13-3A additional information needed to be answered

(5) Priceearnings ratio.

(6) Payout ratio.

(7) Debt to assets ratio.

(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results from 2016 to 2017 of Jergan Corporation.

Compute ratios; comment on overall liquidity and profitability.